Auditor Extra‐Billing and Client‐Initiated Auditor Changes
Year: 2025
Type: article
Study design: Observational Study
Abstract: ABSTRACT This paper examines how auditor extra‐billing and the quality of the auditor–board member relationship affect client‐initiated auditor changes. Extra‐billing is an auditor billing practice where the auditor invoices a higher amount than originally negotiated with the client. Although extra‐billing is common in audit practice, it has not yet received much attention in audit research. Understanding audit as a professional service, we conceptualize extra‐billing as a factor that is instrumental in creating or preventing bonding, which influences the repeat purchasing behaviour of a client, such as retaining an incumbent auditor. Seventy‐eight board members responsible for audit matters completed a case that varied auditor extra‐billing (no extra‐billing or extra‐billing) and the quality of the auditor–board member relationship (good or bad relationship). The results show that both an extra‐billing and a bad auditor–board member relationship increase the likelihood of a client‐initiated auditor change. These results have important implications for auditors, auditees and audit regulators.
DOI: 10.1111/ijau.12373
Authors: Francis Goddard, Martin Schmidt
Institution: ESCP Business School
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,900
OpenAlex ID: W4408318256